Avoiding Buddy Punching

Close to 75 percent of small businesses in the U.S. are affected by what is known as “time theft” each year. Put simply, time theft occurs when an employee accepts pay for time they didn’t actually work. Staying clocked in during breaks, not clocking out to run errands, or checking social media during work are all examples of time theft.

However, the biggest cause of employee time theft doesn’t happen solo. It’s called “buddy punching.”

So, what is buddy punching?

Buddy punching is when a coworker punches your timecard (aka clocks in) in your absence.

Say you’re running late for work and you won’t be able to clock in on time. You send a quick text to a coworker asking them to clock in for you. Or you need to duck out a few minutes early and don’t want the boss to know, and you ask your coworker to clock you out at the actual end of your shift. Maybe you can’t show up for your shift at all. So your buddy does you a favor and punches your timecard by clocking in/out for you—thus the name, buddy punching.

Life happens to all of us. However, a few minutes here and there of coworker buddy punching can certainly add up on your payroll. According to the American Payroll Association, three-fourths of employers lose money to buddy punching, with employees getting 4.5 hours worth of un-worked wages each week.

In the U.S., the federal minimum wage is $7.25 an hour. If your workers are part-time and earn minimum wage, 4.5 hours of buddy punching equals a little over $30 per worker in stolen wages each week. That may not sound like much, but over a year, the average cost of buddy punching could equal close to $1,560 per employee. Since the majority of small businesses employ less than 20 people, multiple employees using buddy punching could cost your payroll upwards of $30,000 annually.

No small business owner wants to give away $30,000 in stolen time. Here’s how you can prevent buddy punching and get a handle on your payroll.

How to prevent buddy punching at work

Create a zero tolerance policy

The cheapest and quickest solution to buddy punching is addressing it head-on. If you don’t already have a formal buddy punching policy in place, now’s the time to put one together. Make it clear that there’ll be zero tolerance for anyone touching another worker’s timecard or using your timekeeping system under a different name—for any reason.

You don’t need to call out specific employees, but announce the buddy punching policy to your team as a group so everyone’s aware. Then print out a copy of the new buddy punching policy and post it where all staff can see it. If you catch an employee buddy punching, it’ll be grounds for termination.

Use passwords

Simple, but effective. Using passwords for employee timekeeping can be a low-cost obstacle to buddy punching. Set specific standards for passwords—including long sequences, numbers, symbols, and capitalization—that make them harder to share or input by another coworker.

Next, educate. In a time when personal data hacks are becoming more common, make sure your employees understand that sharing their timekeeping login could also mean sharing their personal data. If they give a coworker their password, they might be giving them access to personal information.

Get technology on your side

Outside of creating new workplace policies, new tech also provides business owners and managers more resources to prevent buddy punching. Most options are available with little added effort or cost. Instead of using their phone to ask their buddy to clock in for them, built-in features on employees’ devices can keep them clocking in when and where they should be.

1. GPS tracking

With today’s timekeeping software and mobile GPS, you can track an employee’s location as well as their hours. Similar to other smartphone apps, many timekeeping solutions come with GPS tracking and/or geo-fencing, which GPS-stamps an employee’s location on their timesheet when they clock in or only allows them to clock in when they’re within a certain radius of your business.

Depending on the software, employees are typically able to clock in once their GPS is activated or their mobile. Some timekeeping apps even continue to log employees’ locations and send updates to you throughout their shifts. That means you’ll see where employees are when they clock in, and in the case of geo-fencing, make it impossible for them to buddy punch when they’re off the premises.

2. Geo-fencing

Geo-fencing relies on GPS, WiFi, and cellular data to create an invisible “barrier” around your business. You decide how close employees need to be to clock in, whether it’s the parking lot or the front door. Once the barrier is set, an employee can only clock in after their device signals that they’re inside the perimeter.

And like GPS tracking, different mobile timekeeping apps provide different geo-fencing options. Employees either have to be within a certain distance to manually clock in on the app, or they’re automatically clocked in once inside the barrier. They can’t clock in at all away from work or be clocked in by someone else, thus eliminating buddy punching.

3. Biometrics

Turns out, there’s nothing quite like the real thing. Just like thumbprints and facial recognition ensure it’s actually us using our smartphones, the same biometric requirements can be used to confirm it’s the right employee clocking in.

Only 3 percent of employees who commit time theft are able to do so using biometric clocks. Biometric timekeeping eliminates buddy punching by using a unique fingerprint, handprint, or even retina scan. It can be an (almost) foolproof way of keeping employees from abusing your timekeeping system.

However, biometric time clocks can come with higher upfront costs and legal responsibilities. Several states have passed laws protecting employees’ biometric information and stipulating how their information can be used. In some cases, you must have employees’ written consent to collect and store their biometric data. Additionally, there are legal procedures for destroying data once employees leave and their biometric data is no longer necessary. You might also be responsible for notifying employees in case of a hack or data breach.

4. Selfies/Location Pictures

The latest version of Agency Workforce Management includes an all-new Web Clock system designed for smartphones that can require the employee to take a selfie or a picture of the location.

When the employee clocks-in, they will be prompted to take a picture to verify attendance. This picture will then attach to the attendance record and can be used for review. If a picture is missed, managers will be notified and can look into the missing attendance log. Not only does this option confirm that buddy punching is not taking place, but it is also EVV and HIPAA compliant.

Which came first, buddy punching or poor attendance?

Remember: in many cases, buddy punching is a side effect of larger attendance issues, not the problem itself. While you’re already having these conversations with your team, take the opportunity to have a closer look at your overall attendance policy. There may be a deeper problem if employees are regularly taking advantage of the timekeeping system, punching in for each other, and not able to make it to work on time.

In addition to updating your policies and timekeeping system, try out a few of these other low-cost attendance tips:

  • Test drive the quarter-shift method
  • Enforce your attendance policy consistently
  • Hold return-to-work interviews after unscheduled absences
  • Put together an employee attendance performance plan
  • Provide rewards and recognition for good attendance

To learn more about biometric fingerprint readers and how they can help prevent buddy punching at your agency, download our fact sheet.

12 Retention Ideas That are Working for Providers

In this labor market, where agencies face tight margins and increasing shortages, many agencies find they are being pushed into new territory. Many are forced to consider new benefits, new management strategies, and new staff programs that were never options before to maximize hiring & retention.

The following ideas came from a recent agency conference.

Implement Specific Policies to Increase Manager/Staff Interaction

An employee who feels respected and valued is more likely to stay with an agency. However, in the rush of day-to-day management, that can be difficult. It’s important for agencies to create policies that encourage meaningful daily interaction among all employees and their supervisors.

One agency discussed their policy of encouraging supervisors to “round on employees,” meaning that every day the supervisor needs to check in with every one of their direct reports, much like a physician rounding on their patients in a hospital. The formal term is MBWO (Management By Walking About).

Good communication within the agency is important for many reasons, but it mainly helps with retention.

Centralize and Optimize Recruiting Strategy

In a tight job market, agencies can’t afford to have an inefficient hiring process. If the process is dragged out, or the agency appears unresponsive, people will accept other positions and potentially great hires are missed.

Centralize the recruiting process (rather than leaving recruiting in the hands of individual departments or teams), and build a clear hiring process that utilizes applicant technology and on-boarding automation wherever possible. Having an affordable but effective applicant tracking system is key.

Formalize Training for Interviewers so The Right People Are Hired

Make sure you are hiring the right people by training interviewers on what questions to ask and what responses to look for during the hiring process.

Standardize the On-Boarding Process

Most DSP employees leave within three to six months of their start date. If you can get them over that initial stretch, they are more likely to stay. Create a formal on-boarding process that focuses on welcoming the employee to the agency as a whole; explaining your agency’s mission, values, goals, and how the employee fits into that picture. Build a relationship among the employee and their supervisor and coworkers, and use good training to prepare them to do their job well.

Eliminate Drug Screening Where Possible

This is a controversial option and not a real solution for direct care professionals, but there are many other positions where it may help with recruiting issues. Many agencies noted that with marijuana becoming legal in many states, it doesn’t hold the same stigma it once did – particularly among younger generations. This creates a major staffing problem.

One agency explained that this became such an issue that, while they still have drug testing for employees who provide consumer care, they eliminated drug testing among housekeeping, janitorial, grounds keeping, and dining services staff at their facility.

Create a Sense of Camaraderie Among Employees

You want your employees to have multiple ties into your agency at every level. To do that, create opportunities for socialization and build a sense of community. For example, create a Young Professionals Association and allow a small budget to support their activities outside of work, or offer days of service during work hours that allow employees to volunteer together in the community.

Build Connections Through a Peer Mentoring Program

Peer-to-peer mentoring can help employees build confidence in their role and feel a greater connection to the agency. Peers can assist with on-boarding, be a part of training, demonstrate quality work, be a resource for questions and concerns, and offer encouragement in tough situations. Prioritize the role of peer mentor with employees so they don’t feel overwhelmed and unable to meet their role as mentor and employee.

Give Employees a Concrete Personal Growth Plan

Map out the possibilities for advancement and new skill building with every staff member during reviews, and then check in periodically with their process. Offer scholarships for advanced education (that come with commitments to the agency) that allow employees to meet their personal goals. Investing in employees’ personal development helps them grow in their positions and see a long-term future within your agency.

Create a Culture of Visible Recognition and Appreciation

 An email or a personal word of thanks is important, but you should also show that you value employees in more tangible and high-profile ways. Many studies show that recognition is a huge driver in employee performance and satisfaction. Highlight employees in your newsletter, recognize their work publicly at staff meetings, feature staff profiles on your website or social media, or invite a different high-performing employee to attend your board meetings monthly for a special introduction and thank you.

Allow for the Flexibility to Shift Small Policies That Can Make a Big Difference

Employee expectations about workplace culture are changing and creating some freedom in office policies that can have a big impact on day-to-day employee satisfaction. For example, several agencies saw employee satisfaction increase when dress code restrictions were relaxed. One agency improved morale by redesigning the break room for comfort and providing free drinks and snacks, and another noted that allowing employees to bring dogs to the office created a surprising amount of goodwill among employees.

Offer Debt Reduction as an Employee Benefit

Debt is a real concern for many employees, one that often outweighs the desire to save for retirement. For many agencies, offering debt reduction, particularly student loan repayment assistance, can be a major attraction to potential employees. This has gotten a lot of attention across all employment sectors. Last fall, the Internal Revenue Service (IRS) issued a private letter stating that companies could offer contributions to 401k retirement plans matching employee contributions to student loan debt.

Offer Child Care On-Site or a Credit Towards Day Care at Another Provider

Quality, affordable day care is a primary concern for many working parents, so offering subsidized day care can be a huge motivator for employees. Building your own day care center can be a challenge, but several agencies noted that they think of the day care as part of the employee benefit package, and offer anywhere from a 30% to 50% discount for employees. That discount is then charged back to the employee’s department, like their other benefits.

For more information on generating more job interviews, managing the hiring and on-boarding process, download the myApplicants fact sheet.

For more information on an affordable system for inter-agency HIPAA compliant communications, download the myCommunications fact sheet.

For more information on how to manage employee schedules more effectively and keep employees engaged, download the mySchedules fact sheet.

In-House Payroll or Payroll Service?

This is a genuine dilemma with no straightforward obvious answer. Here are the main points that should be considered:

  1. Does a payroll service save time?
    • Employers still need to maintain employee records, PTO, accruals, and deductions on any system. This work does not go away with a payroll service.
    • Payroll services do not offer a payroll rules engine. If your organization has pay differentials, holiday pay, overtime, etc. these may not be automated and can be very time consuming to manage.
    • If processing payroll in-house, allow extra time for tax filings and payments.
  2. Is it cheaper to process payroll in-house?
    • Depends. The cost of running payroll in-house is much lower than using a payroll service, but if your organization needs to hire an extra person or pay overtime, then the savings may be minimal. If your existing staff can handle the extra work, mainly tax filing, then the savings can be significant.
    • Payroll services charge by employee or transaction. If your employees are paid minimum wage, are part time, or are paid sub-minimum wages under a Section 14(c) Subminimum Wage Certificate Program the proportion of the fees to payroll is relatively high.
  3. Cash flow
    • Payroll services require the money to be deposited early. With in-house payroll, the money does not leave your bank account until the direct deposit is released, or the employee cashes a paper check.
    • Payroll services take the taxes out each pay period including the employer taxes. With in-house payroll, the money does not leave your account until the taxes are paid.
  4. Direct Deposit
    • Direct deposit is supported by in-house payroll and payroll services.
    • With in-house payroll, the money can leave your bank account later.
  5. Tax Filings
    • Filing your own taxes takes time and has liability, as the filings must be done. However, many organizations do so.
    • If your organization only operates in one state, filing taxes is relatively straightforward. Filing in multiple states is more complex, even if there is only one employee in a state.
  6. Integration
    • MITC Payroll eliminates the need for Employee Imports and Timecard Exports. Payroll and Timecards are matched up, providing a tight audit trial. The employee check stub automatically displays in myMITC self service.
    • Payroll services often charge extra for General Ledger integration and do not always offer the flexibility in-house payroll does.
    • 401(k) and HSA filings are the same. Payroll services charge extra and may not do a very good job.
  7. Time and Attendance closings
    • Payroll services require the payroll to be processed earlier than with in-house payroll. This can have a knock-on effect on how much time managers and supervisors have to approve time and attendance, and payroll to audit time and attendance. The less time, the more likely the work will be rushed and not done in sufficient detail.
    • If a supervisor or manager needs to delay a time and attendance approval for part of any employee’s time and attendance, doing a “make up” payroll a few days later can be more complicated with a payroll service.

Provider Implements DailyPay to Boost Employee Retention

As the aging population continues to grow, so does the need for care services. But supply isn’t keeping up with demand when it comes to the caregivers required to provide those services, creating unrivaled competition for workers.

To win over prospective employees, providers must differentiate themselves. For BrightSpring Health Services, that means offering daily pay to service providers, whose profession is often characterized by low wages.  

Is semi-monthly or bi-weekly payroll a thing of the past? Traditionally agencies only paid employees 24 or 26 times a year because the payroll process was so complicated. Now with fully automated time and attendance systems that eliminate the costs and risks of paper time sheets and integrate tightly with payroll, that concern may be misplaced.

“Traditionally in our organization, we’ve paid people in a semi-monthly cycle, and that’s the way we’ve always done it,” Rexanne Domico, president of services and neuro rehabilitation at BrightSpring. “The idea really came up when we started talking about how do we pay more frequently? How can we crack that code?”.

Louisville, Kentucky-based BrightSpring, which was formerly known as ResCare, is one of the largest providers in the United States employing over 20,000 caregivers, Domico said.

“The problem sometimes for this workforce is the ability to access pay when they need it,” she said.

With one in four caregivers living below the poverty line, that could discourage prospective caregivers and force them into different, more short-term lucrative lines of work. For example, candidates could receive immediate money waiting tables or earn higher wages working for Amazon, which raised its minimum wage for all employees to $15 last year.

“We fully believe that the companies able to attract and retain caregivers are the companies that are going to see the growth in the coming months and years in the space,” Domico said. “The ability to solve [for pay challenges] for this workforce is … a huge answer to this problem.”

Digging Into Daily Pay

BrightSpring began exploring its daily pay initiative about a year ago. The program, which is called “Pay Out,” went live at the end of 2018. It allows employees across the organization — not just caregivers — to access pay as it’s earned.

Already, about 9,000 employees are using Pay Out, Domico said, and the program is achieving what it’s meant to: attracting employees and improving retention.

“We are seeing a lot of interest when we’re talking with our applicants about Pay Out,” Domico said. “We see caregivers saying they’re picking up additional hours because they can get paid for those hours quicker than working somewhere else. We also see some early impact on retention with the people who are engaging in daily pay.”

New York City-based DailyPay, a financial solutions company, helps BrightSpring provide the benefit to employees.

DailyPay serves a number of companies in the health care space, including home-based care providers, such as BrightSpring and Menlo Park, California-based home care provider Care Indeed. Vera Bradley, Sprinkles Cupcakes and hundreds of other companies are also clients.

“It is not uncommon for a home healthcare company using DailyPay to see 30% to 50% of its caregiver population enrolled in this benefit,” DailyPay CEO Jason Lee  “These same companies have seen on average a 50% reduction of annualized turnover among the population of DailyPay users. The story is very clear: DailyPay is a benefit that caregivers are willing to stay for.”

To take advantage of daily pay, caregivers must first download an app on their phones. After employees complete a shift and BrightSpring confirms the hours, workers can access their wages immediately. When payday comes around, employees are given the remainder of their paycheck.

“It’s very new for us, so some of the results are pending, but I think what’s important in highlighting the program is just the actual determination to do something that’s different and see what the results are going to look like,” Domico said. “Through doing that, we’re likely to be able to attract more people to work, which attracts more opportunity for different types of contracts and relationships with different payers. That’s really what we’re after.”

“DailyPay is a no-cost to the employer benefit,” He said. “It is free to enroll into the service, and there is only a fee when an employee transfers money on the platform. There is a flat ATM-like fee of $1.99 for next day transfer or $2.99 for an instant transfer. This is usually employee paid, but it can be employer subsidized as well.”

Meanwhile, for BrightSpring, daily pay is a commitment to both industry disruptors and caregivers.

“You can either spend more money trying to attract and retain caregivers — or you can just try to do it better,” Domico said. “That’s where we really landed.”

Daily pay also requires real time attendance. Employee hours can be approved daily, processed into payroll and marked paid. Disputed hours can be withheld and paid later.

To learn more about real time attendance, download the fact sheet on myAttendance.

Download the Fact Sheet

Fair Scheduling Trend Could Spell Trouble for Providers

Fair Scheduling Trend Could Spell Trouble for Providers

In recent months and years, retention and rising payroll costs have been a major concern for providers. However, fair scheduling legislation is gaining steam in cities and states across the country, and could soon be an equal issue — potentially making matters more complex.

Fair scheduling legislation varies across the country, but generally, the rules mandate employees must receive:

  • Set work schedules a certain number of days in advance
  • A certain number of rest hours in between shifts

If employers don’t meet requirements, they must pay workers a premium rate. This stipulation could be very difficult for providers to manage in HCBS programs where clients set their own schedule, or in group homes where staff call off at the last minute and a replacement has to provided

In California, workers who earn the minimum wage per hour are entitled to additional pay known as a “split shift premium” when their schedule includes a split shift. The premium is equal to one hour of pay at the rate of the minimum wage. An employee who is paid more than minimum wage may also be due a split shift premium, however, the greater the wage the lower the premium will be.

In some states and cities with fair scheduling laws, the rules only apply to certain industries, such as retail, hospitality, and food services. Some examples include the state of Oregon, along with the cities of San Francisco and Seattle. Vermont includes providers in fair scheduling laws.

In Chicago, a fair scheduling ordinance is being considered that casts a wide net. If passed, it would require employers to give their staff a written notice of their schedules two weeks in advance, and require workers at least 11 hours of time off between shifts. Schedule changes, or inability to meet these requirements, would require employers to pay workers premiums.

mySchedules includes software to comply with FAST (Fatigue Avoidance Scheduling Tool) developed by the US Army and deployed by the federal government. To learn more about mySchedules, download the fact sheet

Pennsylvania EVV Update

DHS recently published some more, but limited, information on EVV.

Which programs are impacted?

Providers serving participants in the OBRA waiver or Act 150 program must adhere to all timelines and guidance issued by DHS in order to comply with EVV requirements in the fee-for-service system. 

Few details available

The Department of Human Services (DHS) is moving forward with a “soft implementation” in September of 2019. DHS will provide more updates as DHS moves through this process. Providers using MITC as their own internal EVV system will be able to interface with the DHS EVV aggregator system but DHS has not yet issued implementation details. 

Pennsylvania has confirmed providers will be able to use their own EVV system and submit information to the state’s EVV vendor. The Department of Human Services is using the existing PROMISe™ fiscal agent contract with DXC for EVV.

This “open” route is the one most states are taking as providers need the flexibility to use a system that best fits their business model to benefit from the potential productivity and billing gains from EVV. Smaller providers or providers with straightforward needs may find they can use the Department’s EVV system for compliance. However based on provider experience in other states, state systems tend to be limited and cause more work.

Many Pennsylvania providers are already using Agency Workforce Management for EVV. For more information on myAttendance for EVV/HIPAA compliance, download the fact sheet below.

U.S. Department of Labor - Managing FMLA

New DOL Guidelines for Vocational Programs

Wage and Hour Updated Guidance for 14(c) Certificate Holders

The U.S. Department of Labor’s Wage and Hour Division (WHD) has published three documents providing guidance on the payment of subminimum wages under section 14(c) of the Fair Labor Standards Act (FLSA). The first two are related to the impact of Rehabilitation Act section 511 and the third provides general guidance on the administration of section 14(c).

Field Assistance Bulletin (FAB) No. 2019-1 concerns the definition of subminimum wages under section 511 and WHD’s enforcement of the limitations on the payment of those wages under section 14(c).  Fact Sheet #39H: The Workforce Innovation and Opportunity Act and Limitations on Payment of Subminimum Wages under Section 14(c) of the Fair Labor Standards Act. The revisions include information on the definition of subminimum wages and timing requirements under section 511, as well as two charts to provide visual summaries for determining when and to whom the specific section 511 requirements apply. 

The fact sheet also cross-references readers to the related regulations issued by the U.S. Department of Education. Fact Sheet #39I:  Adjusting Commensurate Wage Rates under a Section 14(c) Certificate After a Change in the Minimum Wage, provides guidance on taking appropriate action to ensure prevailing wage rates are timely examined and adjusted, and the workers’ commensurate wage rates correspondingly adjusted, as needed, when there is an increase in the federal, state, or a locality’s minimum wage requirements.

Download the fact sheet for more information on how myClients can help providers managing day and vocational programs.